The good news of the Fed Rate cut is that it really did stimulate action in the home equity and refinance world!
An investment banker friend in London emailed me on Monday night to say that she was watching the market dive ...so come Tuesday I was only slightly less dazed than some of us in Mortgage Land when the Fed announced the emergency .75% cut. Home equity lenders went wild ---the phone lines were jammed, the lock desks went offline and general pandemonium ensued.
Rates have been all over the place since...and just started to cool off by Friday afternoon. If you missed the extreme dip on Tuesday/Wednesday it was no fun watching rates rise three and four times a day with some lenders...real time locking was even more fun. What gives? It's hard to communicate to my realtor partners that since December 27 the Fannie/Freddie GUIDELINES have toughened up considerably..so if we had your borrower approved before December 27 and you were in the final preflight stage of getting docs out fo January closings...think again!! Underwriters seem to have been told to take a second look...and a hard one. Getting one to even return your call has been frustrating. But what people need to know is our systems are taxed. Imagine Indymac and other bigger wholesale banks laying off 3500+ employees: now short staffed and overworked-- these dedicated professionals are doing their best.
People often ask me: "Which way are rates going?" My answer---"Every which way but loose!" My best advice is to get your application in and have your broker watch for a rate drop and then lock your rate at an opportune moment. Unless you really have to close in a very short time frame, now is not the time to loose your cool.
Note:Pre-election run up years are notoriously unstable markets so the likelihood of very steep increases (a more buoyant market) is historically predicted after the election dust settles. It depends on who you ask however. some investors favor the pre-electon year volatility as an opportunity to make short term gains.
If you are waiting for Wednesday's predictions of .5% rate cut all bets are off on how long the 'bounce' will take. Why wait for the phone lines to jam again? I think it's our role as mortgage planners to offer sane advice and financing in these insane times.